ASML Logs $130B Slide Over Tariff Uncertainty And China Trade, But Analysts Still See Upside

Uncertainty over President Donald Trump’s tariffs, U.S. export controls, and AI hype fatigue have led to ASML (ASML) shares falling by over 20% in the last 12 months, resulting in a market value drop of over $130 billion.

“All the equipment manufacturers in the space have come down because they are concentrating all the fears around … the U.S. restrictions to China,” Stephane Houri, head of equity research at ODDO BHF, told CNBC in an interview.

Houri also noted the rising debate over whether AI-related capital spending may be running ahead of actual demand, stating, “Demand is not at the level that many people expect.”

However, Wall Street remains bullish as analysts still see growth ahead. According to Koyfin data, the average analyst price target for ASML’s stock is $877.09, representing a potential upside of 15.6% from Tuesday’s closing price.

ASML is a critical supplier in the global semiconductor manufacturing supply chain, producing extreme ultraviolet lithography (EUV) machines used by manufacturers such as Taiwan Semiconductor Manufacturing Co. (TSMC) to produce cutting-edge semiconductors. 

The Dutch company recently began shipping its next-generation system, known as High NA. According to a Reuters report, ASML has shipped five of the 180-ton High NA systems to customers, including Intel, TSMC, and Samsung. While Intel plans to integrate the tool into its 14A process, TSMC has yet to commit, citing limited cost-benefit at this stage.

This could put further pressure on ASML's sales in addition to its sales to China remaining blocked. ASML CEO Christophe Fouquet said in January that he expects the “ratio of our business in China to be lower than what it has been” in both 2023 and 2024. 

Last week, Dutch Foreign Affairs Minister Caspar Veldkamp confirmed that China had renewed its push to ease export restrictions.

In response, David Sacks – President Trump’s AI and Crypto Czar – reiterated that limits on advanced chipmaking exports to China remain “of paramount importance.” 

“If there is an agreement in the end with President Trump and ... Europe and many other countries, they probably will benefit from the relief in the market, and notably in the sector,” Houri added.

After recommending 50% tariffs on European Union imports, Trump on Tuesday called the EU’s recent request for trade talks a “positive event.” 

“This is a positive event, and I hope that they will, FINALLY, like my same demand to China, open up the European Nations for Trade with the United States of America,” Trump said in a post on Truth Social.

Last week, Bank of America (BofA) raised its price target for ASML’s stock to €795 ($900) from €759 ($859) while maintaining a ‘Buy’ rating, citing attractive valuations relative to historical levels.

Exchange rate: €1 = $1.13

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